Description
report is to analyse the feasibility of setting up a five-star hotel and a hotel management training institute in or around Hinjewadi.
DIRECTOR’S PROJECT
Contents
EXECUTIVE SUMMARY ............................................................................................................................ 3 Why HINJEWADI?.................................................................................................................................... 4 Key distribution trends in India's hospitality market .............................................................................. 5 PROSPECTS .............................................................................................................................................. 8 PARAMETERS FOR EVALUATING HOTELS AND STOCKS-......................................................................... 9 THE GLOBAL SCENE ............................................................................................................................... 11 THE HOTEL ............................................................................................................................................ 15 Financial Details: ...................................................................................... Error! Bookmark not defined. INSTITUTE FOR HOTEL MANAGEMENT STUDIES .................................................................................. 22 Hotel Management as a Career Option ............................................................................................ 22 ABOUT THE INSTITUTE .......................................................................................................................... 23 COURSE OVERVIEW............................................................................................................................... 24 FACILITIES: ............................................................................................................................................. 29 BREIF OVERVIEW OF THE MARKETING STRATEGIES ............................................................................. 31
DIRECTOR’S PROJECT
Page 2
EXECUTIVE SUMMARY
Project Title: To analyse the feasibility of setting up a five-star hotel and a hotel management training institute in or around Hinjewadi. Hotels are amongst the most visible and important aspects of a country's infrastructure. Hotel industry is a closely linked one to the tourism industry. A number of factors like promotion of tourism and rapid industrial progress have given a boost to hoteliering. The recent liberalisation of trade and opening up of economy will further lead to revolutionary growth in this sector. With increasing globalisation, career opportunities in this field are not only limited within the country but there are chains of hotels which operate internationally providing scope of a career abroad. It is a glamorous profession which has a bright future. With the growth of hotel industry propelled by foreign and domestic tourism and business travel, the demand for well trained quality personnel too has grown impressively. The diversity of experience in hotel management is greater than in any other profession. Hotel industry involves combination of various skills like management, food and beverage service, housekeeping, front office operation, sales and marketing, accounting. Today, the rise in corporate activity (leading to greater number of business trips) as well as the wish to travel on holiday has made the hotel industry a very competitive one. The project deals with analysing the hotel industry, and then on determining the feasibility of setting up a five star hotel in Hinjewadi, along with a hotel management institute under Symbiosis. Flow of the project first looks at the reasons why Hinjewadi is the chosen location, details of hospitality industry, intricacies of setting up a five star hotel, proposed tariffs, and hotel specifications. After that the project looks at the hotel management institute to be set up, the requirements, provisions etc. Finally a brief marketing plan for the same is presented.
DIRECTOR’S PROJECT
Page 3
Why HINJEWADI?
1. 2. 3. 4. Growing expanse of the IT sector in the area Upcoming educational institutions in the region Hinjewadi on the whole is being developed as the next big thing after main city Pune A hotel plus a hotel school will give the students live hands on experience with customers. Will help them analyse consumer needs in terms of different levels of customer service expected along with the kind of customisation required per customer.
MARKET FOR HOTELS AND TRENDS IN THE INDUSTRYIn the present changing and hyper competitive world, it is significant that a hotel spot the available opportunities. Hotels show particular flexibility to change as the consumer lifestyles, purchasing power and preferences change. Most hotels prefer to customize their service products to satisfy the needs of custom. Here a Strategic control is essential for ensuring that the hotel company's marketing objectives, strategies, and systems are optimally adapted to the current and forecasted marketing environment. A differentiated marketing strategy enhances the appeal of hotel product to several target groups. Market mapping is a marketing tool that enables systematic, independent, and periodic examination of the organization's marketing environment, objectives, strategies and activities with a view to determine problem areas and opportunities and recommending a plan of action to improve the hotels bottomline. It involves three steps viz.; identification of hotel market periphery and the potential competitive advantages, selecting the strategies optimally suited to peruse competitive advantages and signaling to the market the hotel's positioning concept. For example, the Tata Group's Indian Hotels Company Ltd. on 25/06/2004 has launched India's first `no attitude' hotel with tariff under Rs. 1,000. The hotel is located at the heart of India's Silicon Valley-Bangalore. The company plans to open 150 such hotels across the world though a dozen of these will be set up within the next one year in India. This launch assumes significance since it is being set up a hundred years after the country's first luxury hotel and that the group is moving into Economy/ Budget hotel category along with the premium hotel category. So there is an imminent need to look into market mapping techniques and trends to take up global challenges to succeed in all the niches ventured into. These hotels are better known as GINGER hotels.
DIRECTOR’S PROJECT
Page 4
Key distribution trends in India's hospitality market
Today the use of technology has facilitated easy accessibility to customers worldwide via any mode of communication - mobiles, kiosks, web, interactive TV, hand-held devices, SMS, call centers with toll-free worldwide access, travel shops that are one point-of-sale for all travel services. This session will examine what the future holds for the Indian hospitality marketplace. Growth of the travel industry has been spurred by a continuing need for fast, accurate and cheaper travel options. Technological breakthroughs with a trend towards automated platforms are driving the growth of this industry. But when it comes to hospitality, which is an integral part of the tourism industry, the situation is different. Amit Taneja, CEO and cofounder of Desiya, says, "The distribution dynamics are changing across all industries but the hospitality industry has been little slow to catch up since it is a very fragmented industry." The West is enough proof that technology is historically changing the way we function. The customer is becoming more and more technology-savvy even as we speak. "The industry needs to overcome its general reluctance to invest in new ideas and technologies and look for applications that will drive the bottom line. This includes using distribution channels, agents and intermediaries to develop customer information sources, and using technology to bring customers what they want - in real time anywhere in the world. But in future the industry has to think on greater investment in technology, e-commerce and commoditisation. The constant pressure of business targets, sales figures with rising competitiveness in the Indian market has made it vital that focus on customers' needs is viewed as providing opportunities to business. Ongoing expansion of the distribution system continues to facilitate bookings and increased consumer skills in navigating the Web are generating a huge upswing in online reservations of hotel bookings. India's major hotel chains develop more robust online marketing and distribution strategies and online intermediaries race to become one-stop shops for hotel deals. However, Taneja says, "Currently, business generated through the Internet by the hospitality segment is almost negligible. But within the next two to three years the numbers is expected to go up. The industry has realised that it helps shift the controls from the intermediary to the consumer. So hotels that will be technology-savvy and have the rate parity will be able to generate a large chunk of business through the Internet." As hotels grow into large multi-location outfits with increasing size and business volumes, to sustain in a dynamics environment, they need to keep abreast with well-established IT infrastructure that simplifies its daily workings. The future of the hotel technology lies on Inter Protcol (IP), say IT experts. Therefore, hotels need to upgrade their IT-enabled services and simultaneously integrate various operational platforms. The increasing use of IT applications has given a new meaning to service; effective service is measured vis-à-vis guest convenience using technology know-how. In future, one would see Web-based check-ins for groups as well as identity-based check-in procedures like kiosks. The travel and hospitality industry continues to be the sector, which has largely profited from the fast growing economy of India. This has largely been due to the 5.2 m tourist arrivals in FY08 (11% growth) over the previous period. In the last five years, growth stood
DIRECTOR’S PROJECT Page 5
at 17% per annum. The hotel industry went through a rough patch between FY00 to FY04 owing to factors like the Asian financial crisis, Afghan war, Middle East unrest, September 11 attacks, SARS and domestic riots India occupies forty-sixth position among the sixty tourist destinations in the world. A flourishing economy helped boost demand for the industry. To encourage the tourism sector, the government is planning to propose a conditional 10-year tax holiday for all tourism projects in the country. Companies will enjoy full tax exemption up to 50% of profits, but will qualify for tax benefits for the remaining amount only if they re-invest it in tourism projects. The Centre and States are also working out a PPP (Public-PrivatePartnership) model to increase hotel capacity. Efforts to diversify tourist attractions by offering new products such as wellness tourism, medical tourism and golf tourism are expected to have a positive effect on both foreign tourist arrivals and domestic tourism. The five star hotel segment has grown the fastest during the last five years clocking a CAGR of 12%. Further this segment can be divided into 3 sub-segments namely Luxury, Business and Leisure. The growth in this segment indicates the type of travelers coming into the country.
Supply
Supply is catching pace. Metros will witness an oversupply situation after four to five years. Largely depends on business travelers but tourist traffic is also on the rise. Demand normally spurts in the peak season between November and March. High capital costs, poor infrastructure facilities and scarcity of land especially in the metros.
Demand
Barriers to entry
Bargaining power Limited due to higher competition, especially in the metros. of suppliers Bargaining power Higher in metro cities due to increasing room supply. of customers Competition Intense in metro cities, slowly picking up in secondary cities. Competition has picked up due to the entry of foreign hotel chains.
India continued to witness cheering trends in the tourism sector in 2007 with 5.2 m tourists visiting the country, registering a growth of 11% YoY. The Indian hospitality sector continued to be the forerunner of India's economic growth with support from the government. In the Budget 2007, five-year tax holidays for new star-category hotels and convention halls coming up in the National Capital Region by 2010 were announced. The Ministry has sanctioned 225 projects and utilised Rs.4.6 bn for upgradation of infrastructure facilities at important tourist destinations. Even public-private partnership is being planned to develop infrastructure projects.
DIRECTOR’S PROJECT Page 6
However, in the beginning of the year, the global crisis, slowdown in corporate earnings and rising air fares affected the hotel sector to a certain extent. Occupancy levels at hotels catering to business travellers have dropped 5% to 10% since the end of January. With the dip in occupancy levels and new supply coming in certain destinations, the room rates witnessed a marginal increase, which was much slower than what was witnessed last year. Further, with hotel rooms in India being relatively more expensive (last year was unusual when tariffs rose by 25%), a slowdown was inevitable. Average room rates (ARRs) in the branded hotel category in India have increased 280% in the past three years, as per HVS International. Bangalore saw a decline in room rates, while Mumbai and Delhi witnessed a 15% to 18% increase as compared to more than 30% hikes witnessed in FY07. Going forward, the prices will soften by the end of the year as the supplies would start coming in from FY09, which would bring tariffs to a more realistic level. The Planning Commission's High Level Group on services sector has pegged the room shortage in the country at 150,000 rooms by 2010, out of which more than 100,000 will be in the budget category. Not only the Indian hotel majors, but even international players have lined up huge capex plans. Investments of US$ 11 bn over the next 2 years are expected to be earmarked for the hotel industry in India. Further, new segments like budget hotels, service apartments and management contracts are witnessing increasing interest.
DIRECTOR’S PROJECT
Page 7
PROSPECTS
According to the 2002 estimates of the World Tourism Organisation (WTO), international tourist inflow in India by 2020 would be 10 m, which means the tourist influx has to grow at a CAGR of 6.5% for the next 14 years. This makes the country one of the fastest growing tourist destinations in the world second only to China. As of FY08, the increase in the tourist arrivals is well inline with the WTO estimates. India accounts for 0.5% of world tourism. Strong GDP growth, improving infrastructure, confidence in the country's economic prospects, open sky policy and the 'Incredible India' campaign has improved the outlook for India. This positive outlook would increase the tourist arrival in the country and the hotel industry is expected to be the major beneficiary. Even domestic tourism is gaining momentum. Rising disposable incomes, cheaper airfares and better connectivity would continue to increase the demand for rooms. India accounts for 0.5% of world tourism. Strong GDP growth, improving infrastructure, confidence in the country's economic prospects, open sky policy and the 'Incredible India' campaign has improved the outlook for India. This positive outlook would increase the tourist arrival in the country and the hotel industry is expected to be the major beneficiary. Even domestic tourism is gaining momentum. Rising disposable incomes, cheaper airfares and better connectivity would continue to increase the demand for rooms. Although prospects are promising, as mentioned earlier, any change in the global geopolitical situations can and have adversely affected the performance of this sector. Also, the heightened demand for land, especially from real estate players has led to a steep escalation in the prices. Also, shortage of manpower is going to be a huge challenge going forward. Hotel players with a diversified portfolio across different segments are likely to be the key beneficiaries. This should be one of the determining factors while investing in this sector
DIRECTOR’S PROJECT
Page 8
PARAMETERS FOR EVALUATING HOTELS AND STOCKSProfile Unlike FMCG, auto or even banking, hotel industry is more global in nature. As a result, geopolitical events, say September 11 attack, play a vital role in influencing tourist arrivals into and outside India. The ability of a player in the sector to attract the bulk of tourists coming into India and travel within the Indian border depends on select factors. These include the strength of the property portfolio (whether near a heritage site, near airport, commercial capital and so on) and brand awareness. For example, Taj (Indian Hotels) and Oberoi (EIH) are generic names in India when it comes to premium hotel chains. Normally, hotels are capital intensive in nature having long gestation periods, which not only has a bearing on the free cash flows of hotels but also affects the return on capital employed (ROCE) for a period of time. Revenues for a hotel chain are a factor of occupancy rate (number of rooms occupied) and average room rates (popularly termed as ARRs). Revenues are also derived from food and beverages, management services and so on. Consider key factors that influence occupancy rate and ARRs. Occupancy rates Consider the chart below. The hotel sector benefits from both holiday and business travel. Holiday travel in India is generally seasonal in nature. Historically, over 60% of total tourist arrivals into the country is during the period between September-May. On the other hand, business travel is a factor of various factors. This includes government’s effort to promote India as a tourist destination, long-term economic growth prospects and higher foreign participation arising by hike in FDI and FII holding limits in Indian companies and joint ventures.
DIRECTOR’S PROJECT
Page 9
For the last few years inbound (coming into the country) tourists have been around 2.5 m while out bound (going out of the country) tourists have been around 30 m. Out of the inbound, a large part of the travelers to the country are of the business class, while the rest are leisure segment. Connectivity between cities in the form of better road infrastructure, airports and seaports also play a vital role in increasing the share of India in the global tourist pie. India is a country of various cultures and has some of the world-class heritage sites, which when promoted in the global arena, can attract the global tourist. On the domestic leisure travel front (i.e. people traveling within India for both commercial and leisure reasons), there is lot of seasonality involved. Besides, as income increases, aspiration level of the population also gains ground and consequently, spills over into better occupancy rates for hotel chains. While it may not be true for luxury hotels, players in the budget hotel sector and time-share segment benefit in a large way. Average room rates (ARRs) Without getting into complexities, there are three classes of rooms in a hotel i.e. business, leisure and luxury. It is important to understand that room rates are less elastic to a fall in price at the higher end of the segment (luxury) than at the lower end of the spectrum (business/leisure). Therefore, even in a downturn, players like Indian Hotels are relatively able to maintain higher operating margins than EIH. Established players in India have an edge over MNCs and the unorganized segment, due to properties near heritage sites.
Competition also plays a vital role in determining the sector’s ARRs. Currently, the big hotels have average occupancies of 60%. This points to excess supply. That itself is sometimes a dampener on ARRs.
DIRECTOR’S PROJECT
Page 10
THE GLOBAL SCENE
International hotels are derive a big chunk of revenues from casinos and betting arenas. Margins in this segment are also higher. But for Indian hotel majors, setting up casinos and betting arenas is not allowed according to Indian laws. However, when domestic hotels are compared to international hotels then they are fairly competitive in terms of average room revenues. How to put a value to a hotel chain? Net Asset Value (NAV) is the answer. For arriving at a Net Asset Value Setting up a 5 star hotel Add Deduct Net Asset Value (NAV) Divide NAV per share Compare with current market price * depending upon the area of setup Coming to the NAV of domestic hotels, on the basis of replacement cost method let us see the value of the hotels at current prices. By NAV we can arrive at the actual value of the properties of the hotels. Based on that, NAV per share can be calculated, which gives the actual value the shareholder should be paying for being a part of the company. However, for hotels, which have been in the industry for a period of time their NAV would be on the higher side, as the property bought would be at a much lower rate than the present times. Like for instance the NAV of Taj and Oberoi Hotels would be higher than that of ITC Hotels and other hotels. Key things to look at before investing in a hotel stock 1. What are the strategy and the capex plans of the company over the next 5-10 years? As mentioned earlier, hotels are capital intensive in nature having long gestation periods, which not only has a bearing on the free cash flows of hotels but also affects the return on capital employed (ROCE) for a period of time. So the bigger the capex plan, the more caution one should exercise. This criteria is favorable for established hotel chains. = Rs 30-35 m* = Cash + investments = Debt Total No. of Shares = Rs x
DIRECTOR’S PROJECT
Page 11
2. Economic cycles also determine earnings prospects (during a downturn, properties are cheaper and hotel chain generally tend to increase capacity). Moreover, in tough times like September 11, hotel stocks take a beating. It is at this time that the established players should be looked at, for when the concerns fade away, these will be the first ones to benefit from an economic upturn. 3. A hotel chain should not be leveraged on any specific segment i.e. luxury or leisure. Though elasticity is lower at the premium end, when tourist flow is affected, this player could be the worst hit. Diversification reduces volatility in earnings, to an extent. While growth prospects continue to remain heartening, the sector is typically a high-riskhigh-return game due to the vulnerability to external factors. CURRENT PLAYERSTamanna Group enjoys a kind of monopoly in the area as well as on the taste buds of the people in and around the IT park. It has managed to cover three primary segments of the customer base as premium-lemon tree, economy-tamannna executive and cheaper range in tamannna talk about. CURRENT MARKET SITUATION AND THE FUTURE The hospitality industry witnessed a mixed year in 2008. In this article, we shall examine the factors that contributed to the growth and some of the challenges that this sector faces. The sector began the year 2008 on a strong note. Rising tourist inflow, higher occupancy and room rates continued to benefit the hotel players. In the first four months of the year, the tourist arrivals were higher by 11.7% YoY. Existing hotel companies, new foreign players and real estate players continued with their expansion plans. Prospects were looking good, until the sector faced a double blow. Double trouble The worst financial crisis in many decades, high oil prices and a slew of militant attacks hit the hotel industry. Often described as a “fragile” industry, the demand for travel is highly susceptible to events like economic slowdown, wars, disease outbreaks and terrorism. When the Indian tourism and hotel industry had just started gaining recognition worldwide, it was laid low by a double whammy. The first being the global credit crisis and the second, the recent terror attacks on the iconic hospitality landmarks; the ‘Taj Mahal Palace and Tower Hotel’ and the ‘Oberoi Trident’. Nearly 40% of the annual revenues are expected to be lost on account of the recent crisis.
DIRECTOR’S PROJECT
Page 12
Lower growth During 1HFY09, lower corporate spending, fluctuating dollar and opening of credit crisis did impact occupancy rates in some cities like Bangalore, Pune, Hyderabad and Chennai. The room rates however, remained high. While the actual number of tourist arrivals has increased, the YoY growth is on the lower side. While during 2007, a 16% YoY growth was seen in tourist arrivals during the first 8 months, the same stood at 10% YoY this year, indicating slowdown. According to the Ministry of Tourism, October 2008 saw an increase of just 1.8% in the number of foreign tourist arrivals compared to the same time in 2007.With the latest terror strike (26/11) during the onset of the peak season, things got murkier. This prompted the Indian government to ask hotels to slash their prices in the hope of keeping demand stable. Though the room rates have officially increased, hotels are selling corporate travel packages at huge discounts to maintain occupancy levels. Tour operators believe that the real discounts and tariff cuts are as high as 30% to 50%. With hotel rates touching unreasonably high levels last year, a correction was nevertheless due. Going forward 2008 was definitely a year to forget for the hotel industry and the government is taking plenty of initiatives to revive it. 2009 is to be observed as the ‘Visit India Year’. The concept is that those who visit India in 2009 would thereafter experience India's rural tourism, eco tourism, adventure tourism, wellness tourism in specially worked out packages in 2010 and 2011. Further, the rate cuts would also make India a cheap tourist destination to visit. Further, cost pressures, liquidity crisis and regulations concerning the real estate sector have made funding for hotel projects difficult. This coupled with unrealistically high land prices and government red tapism could result in hotel projects taking longer to fructify. Real estate players (DLF, Unitech, Parsvnath) are being hit adversely by the market slowdown. The phenomenon is expected to have an effect on hospitality development in India. This may lead to a stop or delay in the completion of projects as well as a revision of the project expenditure. As per KPMG, only 60% of hotel projects announced in key metros are operational as per schedule. Developers have also diverted their plans in favour of commercial or residential buildings due to liquidity crunch and higher land prices leading to a longer breakeven period. Considering all these factors, industry estimates that just over half of the planned 0.1 m new rooms will finally be built. Hence, considering the demand supply mismatch, the new room additions will not create overhang. Thus, we believe that the existing players would benefit from the continued demand-supply mismatch once the economy revives. While leisure travel would continue to be low, business travel, domestic travel, medical tourism and mid market segment would be the target areas.
DIRECTOR’S PROJECT
Page 13
As per estimates, domestic tourism has risen from 366 m in 2004 to 462 m in 2006, emerging as a major driver for the industry. Just to give an idea about how big this opportunity is, we can say that the domestic tourists’ number is more than the entire population of the US. This slump in the industry will also provide opportunities to existing hotel companies with high cash in their kitty to acquire distress assets at cheaper valuations. While the summer would be cold for the hotel industry, with India’s fundamental prospects being attractive over the long term, the momentum would get better.
DIRECTOR’S PROJECT
Page 14
THE HOTEL
Hinjewadi IT Park The Hinjewadi IT Park (officially called as the Rajeev Gandhi IT Park), is a project undertaken by MIDC to promote the IT sector in Pune. When completed, the Hinjewadi IT Park is expected to have an area of about 2800 acres. The estimated investment in the project is Rs. 600.0 million. The whole project will be developed in phases. Here is an approximate breakdown of the phases: Phase I: 198 acres Phase II: 470 acres Phase III: 985 acres Phase IV: 1100 acres The IT Park has been planned for following facilities:
? ? ? ? ? ?
Connectivity through Bharat Sanchar Nigam Limited (BSNL) Exchange and Software Technology Parks of India (STPI) 24/7 electricity supply 24/7 water supply, including a Hill Service Reservoir Garden, landscaping and a recreation center Underground drainage system Fully asphalted roads with footpath and side gutters
In addition, the following facilities are planned as an integral part of the overall development:
? ? ? ? ?
Golf Course 3-star hotel Business Resort Tree plantation in open spaces Development of Residential Zones including schools
Hence Hinjewadi with it s IT companies forms a major business opportunity for the Hotel Industry. The current players in this target business group in Pune are : The major players in the Hotel Segment we are targeting in Pune are: ? ? ? ? ? ? ? Lemon Tree Hotels St Laurn Hotels Hotel Taj Blue Diamond Quality Inn Centurion The President Hotel Pride Hotel Le Meridiens
Page 15
DIRECTOR’S PROJECT
?
The Central Park
Out of these, the hotels which are located in Hinjewadi are :
? ? ? ?
Lemon Tree Hotel St Laurn Hotel Nirali Hotel Tamanna
The following part of the report will cover the areas involved in setting up a hotel in the area to exploit the business opportunity.
Demand Forecast: Total number of Hotel rooms in Hinjewadi: 322 Average Occupancy Rate: 77% Total number of rooms in the 3-star and 4-star category: 207 Average Occupancy Rate: 72% ARR (Average Room Rates) in the 3-star and 4-star category: 13500 Proportion of the planned area of Hinjewadi that is developed: 21 % (660 acres out of the planned 2800 acres) Industrial growth rate in Hinjewadi: 12% Estimate of growth in the demand of the hotel rooms: 6% Forecast of the demand of rooms in 3 star and 4-star category:
1 253 2 284 3 319 4 358 5 401 6 450 7 504 8 565 9 633
DIRECTOR’S PROJECT
Page 16
Revenue Forecasts:
Year 1 Year 2 Year 3 Year 4 Monthly Revenue Annual Revenue 25200000 302,400,000 338,688,000 379,330,560 424,850,227 Salaries of Staff 8,712,000 9,234,720 9,788,803 10,376,131 Administration Expenses 210,200,000 220,710,000 231,745,500 243,332,775 -1500000000 83,488,000 108,743,280 137,796,257 171,141,321
Year 5 475,832,254 10,998,699 255,499,414 209,334,141
Year 6 532,932,125 11,658,621 268,274,384 252,999,119
Year 7 596,883,980 12,358,139 281,688,104 302,837,738
Year 8 668,510,058 13,099,627 295,772,509 359,637,922
Cost to set-up the hotel: 150 crores Cost of Capital: 12% NPV: 11, 48, 35,774 Rs Location Details: Three sites that have been identified for the project are: Wakad Flyover area Hinjewadi Phase 2 Hinjewadi Phase I ( Beyond St Laurn Hotel)
Out of the above sites, area near Wakad Flyover is a promising because of the following reasons: Proximity to Mumbai Pune Expressway Proximity to Hinjewadi IT Park Proximity to Pune City Proximity to Balewadi Stadium
Permission and Clearances Requirement: For setting up the hotel, clearances from the following authorities would be required: Maharashtra industrial Development Corporation Maharashtra Pollution Control Board Pimpri Chinchwad Municipal Corporation
Page 17
DIRECTOR’S PROJECT
Construction of the Hotel: The construction of the hotel will be outsourced to separate contractors. The construction contract would cover the following details. Design of the rooms. Construction of the entire facility. Interior Design Machinery, Appliances. IT infrastructure
The selection of the appropriate contractor is left to the discretion of the Hotel Management. The hotel would be actively involved in the construction phases in terms of approvals and monitoring. Technical Aspects: The various technical aspects of the project would be The IT Infrastructure Major Machinery and Electrical Equipment Requirement Safety Considerations
Area Requirement: After conducting a detailed study of the other hotels in the area and the future business requirement, the total number of the rooms planned for the hotel is 100. The total area requirement for the hotel along with the rooms and the other facilities would be 25,000 square feet.
Accommodation Details: The detailed breakup of the accommodation facilities is as given below:
Room Type Superior Room Deluxe Room Executive Room Studio Room Executive Suite Number 15 55 23 5 2 Type Rooms with single beds Rooms with single beds Rooms with king/twin beds, electronic safe Rooms with king beds and large sitting area, including one room for the physically challenged, electronic safe Suites with king beds, a separate sitting room and great views (each interconnecting to a Deluxe Room), electronic safe
DIRECTOR’S PROJECT
Page 18
As the Hotel would be a 4 star type, the hotel would have following facilities as a part of the rooms: ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? Dining: The hotel would have following dining features: An eclectic all day dining menu includes Indian, European, American and pan-Asian cuisines in addition to special home grown recipes A coffee Shop Recreational Bar and Lounge Air conditioning High-speed WiFi net access A full-sized work desk with ergonomically-designed executive chair 3 telephones with global direct dial and voice mail Power outlets at desk level (adaptors available on request) Flat-screen color TV with multi-channel cable Tea and coffee maker Mini-bar with 2 complimentary bottles of packaged drinking water (provided daily) Orthopedic mattress with high-quality pillows and bed linen Full-length mirror Automatic telephone wakeup call service Opaque curtains to provide total blackout Well-appointed bathroom with high pressure hot and cold water and complete range of toiletries Vacuum-sealed, double-paned windows for noise reduction Electronic safe deposit box
Corporate Meeting and Conference Rooms There would be a total number of the 2 rooms for the meeting purposes – M1 and M2. M1 would have a capacity of 60 theater style, 48 classroom style and 38 U-shape. Capacity of M2 would be 16 theater style and 12 classroom or boardroom style. The meeting room would be equipped with the following facilities: Wifi Broadband Internet Access. Surround Sound System Built in LCD projector with screen. Large screen television with attached DVD player
Safety Considerations: In terms of growing safety considerations, the hotel would have following features:
DIRECTOR’S PROJECT
Page 19
? ? ? ? ? ? ? ? ?
Individual fire indicators outside each room to expedite emergency response in case of a fire emergency Wide angle (110 degrees) peephole on room entrance doors Safety chain and double lock facility in the main room door interactions Emergency procedures notice displayed behind the entrance door Fire resistant room door (up to a limited extent) All entrance doors will lined with an environmental seal to minimize noise and protect the room from external smoke, in case of fire Smoke detector in each room Water sprinklers in each room for enhanced fire safety Entrance door and bathroom doors can be double locked from the inside
Tariff Rates: The initial tariff rates that have been planned for the rooms are as follows. The tariff rates have been decided by taking into consideration the tariff rates of the other hotels in the area and the competitive advantage:
Room Type Superior Room Deluxe Room Executive Room Studio Room Executive Suite Tariff Rates ( Single) in Rs. 8000 9000 11000 13000 16000 Tariff Rates ( Double) in Rs. ----11000 13000 15000
Target Market 1. Businessmen – Travel for business purposes. 2. Business Executives, IT professionals – Can be foreign delegates, employees, professional trainers, job seekers, etc. 3. Faculty / staff of colleges in the area (SIC, IIIT, Indira College, etc.) 4. Students or their family members Existing Rates 1. 2. 3. 4. Lemon Tree Hotel – Rs 9500 – Rs 14500 per day St Laurn Hotel – Rs 13200 - 15400 per day Hotel Nirali – Rs 1000 - 3000 Hotel Tamanna – Rs 2200 – 3200 per day
Man Power Requirement: Total Manpower requirement of the hotel would be 55.The details of the manpower requirement are as follows: Hotel Receptionists- 3 ( working in three shifts )
Page 20
DIRECTOR’S PROJECT
-
Hotel Attendants – 10 ( Working in three shifts) Room Service Staff – 20 (Working in three shifts ) Kitchen Staff – 20 ( Working in three shifts) Manager – 2 ( Working in two shifts)
DIRECTOR’S PROJECT
Page 21
INSTITUTE FOR HOTEL MANAGEMENT STUDIES
The boom in the tourism industry has resulted in the immense growth of hotel industry in India. The hotel industry promises a bright future for anyone who wishes to take up a career in this segment. The students opting for hotel management career courses must have an affinity towards socializing and understanding the needs of the people. As hotels fall under the service industry, the motive of hotel management courses in India is to prepare the students to face the challenges of this competitive world. As far as tourism industry in India is concerned, it is attracting tourists from across the world and this definitely calls for quality hospitality.
Hotel Management as a Career Option
Hotel management is one of the most interesting career options in the contemporary job market. Career training from a recognized and reputed hotel management institute is just an icing on the cake. In India there are many hotel management institutes and colleges which provide hospitality or hotel management courses. These hotel management courses make one aware of the operating-sections of the hotel industry like front office, general operations, sales and marketing, food and beverage, service keeping and catering. THE TOP TEN HOTEL MANAGEMENT COLLEGES IN INDIA 1. Oberoi Centre, Delhi 2. IHM, Mumbai 3. WGSHA. Manipal 4. IHM, Delhi 5. IHM, Aurangabad 6. IHM, Bangalore 7. IHM, Chennai 8. IHM, Calcutta 9. IHM, Ahmedabad 10. Christ College, Bangalore (Source: Outlook-Cfore survey, Outlook, 11th June, 2007)
The four parameters used for evaluation of these institutes were- faculty, pedagogic systems, infrastructure and placements.
Since Symbiosis International University has a strong foothold in the education sector, it can leverage the same in developing a hotel management institute of great repute.
DIRECTOR’S PROJECT
Page 22
ABOUT THE INSTITUTE
The institute will be located next to the five star hotel that has been mentioned in the previous section of this report. The fact that the hotel would be partly owned by Symbiosis itself, would allow the institute to provide its students will hands on industry experience, through training and live demonstrations in the hotel itself. Since Hotel Management is a people oriented field, which needs more of practical knowledge and exposure, the benefit of having a five star hotel set up by the same parent university would proved ample exposure to the students, and would work as a competitive advantage for the new institute. Also, in-hotel learning and classes can be held, which is a rare concept, but one of the most effective ways to develop students into leading hospitality professionals. Also, the Institute will be having tie ups with international universities for student exchange programs and knowledge sharing, so as to provide its students with an international exposure and experience of the hotel management industry. COURSES OFFERRED Initially, the institute can start by offering a regular, 3-year full time graduation (BSc.) in Hotel Management. After having developed a strong brand name, the college can look at offering more courses like: - Diploma in Food Production (6 months) - Diploma in Food & Beverage Management (6 months) - Post Graduate Diploma in Hotel Management - Diploma in Accommodation Management (6 months) However, in the initial years, the college would look at developing its expertise into the field of imparting hotel management education, and should hence start off with one course only.
DIRECTOR’S PROJECT
Page 23
COURSE OVERVIEW
The course would be divided into 6 semesters, spread across 3 years, with mandatory training period during the summer break, i.e. 6-8 weeks of internship in hotels, airlines etc. Semester One: Would give a basic understanding to the student about the hospitality industry, various important details, and would look at basic skill development. The subjects that may be offered are: 1. 2. 3. 4. 5. 6. 7. 8. 9. Foundation Course in Food & Beverage Service Foundation Course in Front Office Operations Foundation Course in Accommodation Operations Foundation Course in Nutrition & Food Science Basics of Accounts & Finance Foreign Language IT in Hospitality Industry Principles & Practices of Management Business Communication & Etiquette
Food and Beverage Service:
The course aims at developing a comprehensive knowledge and understanding of restaurant service in the hotel and catering industry. It also aims to enable the student to acquire professional competence at basic levels and to acquire the requisite technical skills in the principles of food service and its related activities. ? ? ? ? ? ? ? ? Introduction to the hotel and catering industry Layouts of food service areas Food and beverage service equipment Meals and menu planning Dining service methods and procedures Simple control systems Non-Alcoholic Beverages and their service Tobacco
Front Office Operations:
This course aims at equipping the students with the necessary skills to work in a nonautomated, semi-automated and automated system of a Front Office. He is also equipped to understand the guest cycle and gains skills in effective handling of routine Front Office procedures. ? ? ? ? ? ? Introduction to Front Office Operations Importance of Reservation and its procedures Check-in and Check-out procedures Preparing Guest Weekly Bills Telephone Etiquette Complaint handling
Page 24
DIRECTOR’S PROJECT
Accommodation Operation:
This course aims to establish the important role of accommodation services within the hospitality industry. It also gears the student to acquire skills and knowledge necessary to successfully identify the required standards in this area and to consider all aspects of cost control and establishing profitability. ? ? ? ? ? ? Role of Housekeeping in the Hospitality Operations Cleaning equipment and agents Operating Procedure For Servicing a Guest Room Safety Procedure Periodic Cleaning Programme and Public Area upkeep Inter-departmental Relations
Financial Accounting :
The student required to understand the significance and the role of finance in the hotel and tourism industry and to develop an attitude of cost controls. The above aims are achieved through the use of practical accounting procedures. ? ? ? ? ? ? ? ? Accounting practices in business organisations Financial statements Revenue and expense accounts Transaction analysis Debit and credit concepts Accounting records and information Presentation of basic accounting information Use of accounting software
IT in Hospitality
This course is structured to introduce the student to the computer and their terminology and thereby make the student computer literate. This objective is achieved through practical hands-on exposure. ? ? ? Computer fundamentals --- basics of hardware and software. Introduction to an Operating System Word Processing.
Languages
French : The objective in imparting training in French is to equip students in the French language to have proficiency in spoken French with special reference to the hospitality industry.
DIRECTOR’S PROJECT
Page 25
Nutrition and Food Science
The course aims to impart knowledge in the basic principle of Nutrition and their practical applications. While in food science the students learn about the harmful and beneficial role of microorganisms in food. Nutrition : ? ? ? ? Proximate principles Minerals Vitamins Meal planning
Food Science ? ? ? ? ? ? Microbes Food Infection and Poisoning Hygiene Management Systems (HACCP) Food Spoilage and Preservation Food Adulteration Food Additives
Semester Two would offer a deeper understanding of the hospitality industry and management subjects. 1. 2. 3. 4. 5. 6. 7. Food Production Hotel Engineering Foundation Course in Tourism Marketing 1 Leadership Principles and practices of management Foreign Language
Food Production:
The course aims at developing a basic awareness of the technical skills required in the production department. It also gives a comprehensive insight into the commodities required, their characteristics, uses, and handling procedures. ? ? ? ? ? ? ? Kitchen organisation and equipment Basic menu planning Basic principles of food production Methods of cooking Bakery and patisserie Culinary terms Foundation ingredients
Page 26
DIRECTOR’S PROJECT
Hotel Engineering
? ? ? ? ? Preventive and Breakdown Maintenance Heating, Lighting and Ventilation Systems Sanitary and Plumbing Systems Refrigeration and Air-conditioning Fire safety procedures
After the first year of college, the students would be required to pursue 6-8 weeks of industry training in hotels, airlines etc. This would be graded project. Year 2 subjects would offer students a wider variety in terms of content, and their would be more focus on practical learning. Semester 3: 1. 2. 3. 4. 5. 6. 7. 8. Food Production & Patisserie Food & Beverage Service Operation & Management Front Office Operations & Management Accommodation Operations & Management Hotel Accounting Human Resource Management & Law Approaches to Research Hospitality Marketing 2
Semester 4: 1. 2. 3. 4. 5. Food Safety and Quality Communication skills in English Management in Tourism Contemporary Issues in Hospitality Industrial Training, in college hotel with regular evaluation.(10 weeks)
Once the students complete their year two in the course, they are expected to get real work life experiences through internship of 15-20 weeks in a reputed hotel. These internships need to be routed through the college. Semester 5: 1. 2. 3. 4. 5. Advance Food Production Operations Advance Food And Beverage Operations Front Office Management Accommodation Management Food & Beverage Management
DIRECTOR’S PROJECT
Page 27
Semester 6: 1. 2. 3. 4. 5. Facility Planning Financial Management Strategic Management Research Project Tourism Marketing
The III year involves detailed study in the 4 core areas : 1. 2. 3. 4. Food Production Food and Beverage Service Front Office Management Accommodation Operations
Along with practical sessions to develop practical competence in the above core areas, the student also gets exposure to allied areas like 1. 2. 3. 4. 5. Hotel Management Application of Computers Language -- French Marketing and Sales Law
ADMISSIONS Student intake: 120 Admission Criteria: The candidate should have successfully cleared 10+2 from state or central board, with a minimum percentage of 55%. A national Aptitude entrance test will be conducted, testing the candidates on the following parameters: o Quantitative aptitude o English o Data Interpretation and Reasoning o General knowledge
Once the candidates are shortlisted on the basis of the entrance test scores, interviews will be conducted, and top 120 students are selected. Hostel accommodation compulsory for all students.
DIRECTOR’S PROJECT
Page 28
FACILITIES:
FOOD PRODUCTION LAB: Fully equipped with: 1. 2. 3. 4. ADVANCED TRAINING KITCHEN QUANTITY TRAINING KITCHEN BASIC TRAINING KITCHEN BAKERY
LAUNDRY: The Institute will have a well-equipped automated laundry along with facilities for training students in Guestroom Management. COMPUTER LAB Equipped with 50 terminals on a Local Area Network with the latest multi-media systems with Internet connectivity. Students will have hands-on experience with HMS and application packages LIBRARY The Institute will have a well-stocked library with the latest books, periodicals, journals both national and international covering all aspects of Hotel, Tourism, Hospitality, Travel and Management. The library will also have a good collection of Video tapes on all aspects of management and hoteliering which could be viewed by the students. The Library will have multi-media resources enabling students to access Internet. VIDEO PRODUCTION LAB The Institute will have a video production lab equipped with the state-of-the-art equipment to produce training films. Students will be required to produce training films as part of their projects during the Final Year of study.
DIRECTOR’S PROJECT
Page 29
FRONT OFFICE Role playing, Situation Handling, Other Front Office related exercises, Property Management Systems, accounting are the key areas of training in this lab. RECREATIONAL FACILITIES:
1. 2. 3. 4. 5.
Basketball court Table Tennis Swimming Pool Gym and Fitness Centre Games Room for indoor games
AUDITORIUM: A large, plush, air-conditioned auditorium, with a seating capacity of 300 students. COURSE FEES: Rs. 52,500 per annum, inclusive of hostel and mess charges. FACULTY: Since the student intake is 120 students, so to maintain a healthy student-faculty ratio, the batch will be divided into 3 sections of 40 students each. The faculty would comprise regular in-house faculty as well as industry experts who come as visiting faculty. Some qualifications that the faculty are expected to have: A wide variety of professionals with ample industry experience Extensive teaching experience Diploma holders in o Hotel Management o Catering Technology o Applied Nutrition o Tourism Management
Science graduates and post graduates Commerce and accounts graduates Page 30
-
DIRECTOR’S PROJECT
BREIF OVERVIEW OF THE MARKETING STRATEGIES
MARKETING OBJECTIVES: 1. Create awareness about the hotel. 2. Position it as a exclusive five star hotel, which pampers the customers. 3. Position it in the gap in the market, since most hotels around Hinjewadi are not high on the exclusivity quotient. 4. Create Brand preference. 5. Spread awareness about the institute as well. TARGET MARKET STRATEGY: The targets would primarily be travelling professionals from the following industries who frequent Pune for work. IT Travel Trade and Commerce Automotive
MESSAGING In order to present and position itself as a exclusive five star hotel, we would need to keep the messages in all our communication very high quality, innovative, subtle and classy. The messaging would represent the high standard we want to be associated with. Brochures will be printed on high quality paper, with quality pictures. PROMOTION ? Primary focus will be on print ads in trade publications, internet and high end magazines. ? Direct mail campaigning to prospective customers would help to increase the effectiveness of promotion, as it is a form of targeted promotion. ? A high amount of Public Relations activities will be undertaken so as to create awareness and develop a positive public image for the hotel. ? Present the hotel as a supportive member of the society, by participating in various significant local events. ? For direct marketing, we can buy the contacts information of select list of corporate houses and send them information about the hotel, and invites to special gatherings. ? For the institute, advertise in youth newspapers, and supplements like Education Times, HT Horizon, along with tie ups with coaching institutes. ? Carry out counselling sessions in schools for students, to make them aware of hotel management as a career option, and our institute.
DIRECTOR’S PROJECT
Page 31
WEB PLAN Develop an attractive, interactive website, so that customers can have online bookings, check their room status and make payment online. The look and feel of the website should be in line with the exclusive image of the hotel. Make sure that all major travel sites like makemytrip.com, yatra.com list our hotel in their website when customers search for hotels. SALES For sales, we would depend on corporate visits the most. Repeat visits by key corporate would form the bulk of our sales. So it becomes important for us to develop long lasting relationships with those key accounts through Loyalty Programs. Offer them discounts; make them aware of any updates of the hotel activities, induce them to celebrate their functions in the hotel, so give them extra benefits. In short, make them feel part of the family. Since the most important part is building relationships, we need to make each business traveller feel that we remember her/him and their details, likes, dislikes so as to make them feel special. This requires a great deal of integration in all business activities and implementation of ERP. PROSPECTING Whenever a new customer comes to the hotel, we should be able to determine whether it is for business of leisure. If it is for business, we should be able to collect his business card, and send to his organisation a corporate packet making them aware of our hotel, corporate packages/pricing and special business amenities.
DIRECTOR’S PROJECT
Page 32
doc_910516908.docx
report is to analyse the feasibility of setting up a five-star hotel and a hotel management training institute in or around Hinjewadi.
DIRECTOR’S PROJECT
Contents
EXECUTIVE SUMMARY ............................................................................................................................ 3 Why HINJEWADI?.................................................................................................................................... 4 Key distribution trends in India's hospitality market .............................................................................. 5 PROSPECTS .............................................................................................................................................. 8 PARAMETERS FOR EVALUATING HOTELS AND STOCKS-......................................................................... 9 THE GLOBAL SCENE ............................................................................................................................... 11 THE HOTEL ............................................................................................................................................ 15 Financial Details: ...................................................................................... Error! Bookmark not defined. INSTITUTE FOR HOTEL MANAGEMENT STUDIES .................................................................................. 22 Hotel Management as a Career Option ............................................................................................ 22 ABOUT THE INSTITUTE .......................................................................................................................... 23 COURSE OVERVIEW............................................................................................................................... 24 FACILITIES: ............................................................................................................................................. 29 BREIF OVERVIEW OF THE MARKETING STRATEGIES ............................................................................. 31
DIRECTOR’S PROJECT
Page 2
EXECUTIVE SUMMARY
Project Title: To analyse the feasibility of setting up a five-star hotel and a hotel management training institute in or around Hinjewadi. Hotels are amongst the most visible and important aspects of a country's infrastructure. Hotel industry is a closely linked one to the tourism industry. A number of factors like promotion of tourism and rapid industrial progress have given a boost to hoteliering. The recent liberalisation of trade and opening up of economy will further lead to revolutionary growth in this sector. With increasing globalisation, career opportunities in this field are not only limited within the country but there are chains of hotels which operate internationally providing scope of a career abroad. It is a glamorous profession which has a bright future. With the growth of hotel industry propelled by foreign and domestic tourism and business travel, the demand for well trained quality personnel too has grown impressively. The diversity of experience in hotel management is greater than in any other profession. Hotel industry involves combination of various skills like management, food and beverage service, housekeeping, front office operation, sales and marketing, accounting. Today, the rise in corporate activity (leading to greater number of business trips) as well as the wish to travel on holiday has made the hotel industry a very competitive one. The project deals with analysing the hotel industry, and then on determining the feasibility of setting up a five star hotel in Hinjewadi, along with a hotel management institute under Symbiosis. Flow of the project first looks at the reasons why Hinjewadi is the chosen location, details of hospitality industry, intricacies of setting up a five star hotel, proposed tariffs, and hotel specifications. After that the project looks at the hotel management institute to be set up, the requirements, provisions etc. Finally a brief marketing plan for the same is presented.
DIRECTOR’S PROJECT
Page 3
Why HINJEWADI?
1. 2. 3. 4. Growing expanse of the IT sector in the area Upcoming educational institutions in the region Hinjewadi on the whole is being developed as the next big thing after main city Pune A hotel plus a hotel school will give the students live hands on experience with customers. Will help them analyse consumer needs in terms of different levels of customer service expected along with the kind of customisation required per customer.
MARKET FOR HOTELS AND TRENDS IN THE INDUSTRYIn the present changing and hyper competitive world, it is significant that a hotel spot the available opportunities. Hotels show particular flexibility to change as the consumer lifestyles, purchasing power and preferences change. Most hotels prefer to customize their service products to satisfy the needs of custom. Here a Strategic control is essential for ensuring that the hotel company's marketing objectives, strategies, and systems are optimally adapted to the current and forecasted marketing environment. A differentiated marketing strategy enhances the appeal of hotel product to several target groups. Market mapping is a marketing tool that enables systematic, independent, and periodic examination of the organization's marketing environment, objectives, strategies and activities with a view to determine problem areas and opportunities and recommending a plan of action to improve the hotels bottomline. It involves three steps viz.; identification of hotel market periphery and the potential competitive advantages, selecting the strategies optimally suited to peruse competitive advantages and signaling to the market the hotel's positioning concept. For example, the Tata Group's Indian Hotels Company Ltd. on 25/06/2004 has launched India's first `no attitude' hotel with tariff under Rs. 1,000. The hotel is located at the heart of India's Silicon Valley-Bangalore. The company plans to open 150 such hotels across the world though a dozen of these will be set up within the next one year in India. This launch assumes significance since it is being set up a hundred years after the country's first luxury hotel and that the group is moving into Economy/ Budget hotel category along with the premium hotel category. So there is an imminent need to look into market mapping techniques and trends to take up global challenges to succeed in all the niches ventured into. These hotels are better known as GINGER hotels.
DIRECTOR’S PROJECT
Page 4
Key distribution trends in India's hospitality market
Today the use of technology has facilitated easy accessibility to customers worldwide via any mode of communication - mobiles, kiosks, web, interactive TV, hand-held devices, SMS, call centers with toll-free worldwide access, travel shops that are one point-of-sale for all travel services. This session will examine what the future holds for the Indian hospitality marketplace. Growth of the travel industry has been spurred by a continuing need for fast, accurate and cheaper travel options. Technological breakthroughs with a trend towards automated platforms are driving the growth of this industry. But when it comes to hospitality, which is an integral part of the tourism industry, the situation is different. Amit Taneja, CEO and cofounder of Desiya, says, "The distribution dynamics are changing across all industries but the hospitality industry has been little slow to catch up since it is a very fragmented industry." The West is enough proof that technology is historically changing the way we function. The customer is becoming more and more technology-savvy even as we speak. "The industry needs to overcome its general reluctance to invest in new ideas and technologies and look for applications that will drive the bottom line. This includes using distribution channels, agents and intermediaries to develop customer information sources, and using technology to bring customers what they want - in real time anywhere in the world. But in future the industry has to think on greater investment in technology, e-commerce and commoditisation. The constant pressure of business targets, sales figures with rising competitiveness in the Indian market has made it vital that focus on customers' needs is viewed as providing opportunities to business. Ongoing expansion of the distribution system continues to facilitate bookings and increased consumer skills in navigating the Web are generating a huge upswing in online reservations of hotel bookings. India's major hotel chains develop more robust online marketing and distribution strategies and online intermediaries race to become one-stop shops for hotel deals. However, Taneja says, "Currently, business generated through the Internet by the hospitality segment is almost negligible. But within the next two to three years the numbers is expected to go up. The industry has realised that it helps shift the controls from the intermediary to the consumer. So hotels that will be technology-savvy and have the rate parity will be able to generate a large chunk of business through the Internet." As hotels grow into large multi-location outfits with increasing size and business volumes, to sustain in a dynamics environment, they need to keep abreast with well-established IT infrastructure that simplifies its daily workings. The future of the hotel technology lies on Inter Protcol (IP), say IT experts. Therefore, hotels need to upgrade their IT-enabled services and simultaneously integrate various operational platforms. The increasing use of IT applications has given a new meaning to service; effective service is measured vis-à-vis guest convenience using technology know-how. In future, one would see Web-based check-ins for groups as well as identity-based check-in procedures like kiosks. The travel and hospitality industry continues to be the sector, which has largely profited from the fast growing economy of India. This has largely been due to the 5.2 m tourist arrivals in FY08 (11% growth) over the previous period. In the last five years, growth stood
DIRECTOR’S PROJECT Page 5
at 17% per annum. The hotel industry went through a rough patch between FY00 to FY04 owing to factors like the Asian financial crisis, Afghan war, Middle East unrest, September 11 attacks, SARS and domestic riots India occupies forty-sixth position among the sixty tourist destinations in the world. A flourishing economy helped boost demand for the industry. To encourage the tourism sector, the government is planning to propose a conditional 10-year tax holiday for all tourism projects in the country. Companies will enjoy full tax exemption up to 50% of profits, but will qualify for tax benefits for the remaining amount only if they re-invest it in tourism projects. The Centre and States are also working out a PPP (Public-PrivatePartnership) model to increase hotel capacity. Efforts to diversify tourist attractions by offering new products such as wellness tourism, medical tourism and golf tourism are expected to have a positive effect on both foreign tourist arrivals and domestic tourism. The five star hotel segment has grown the fastest during the last five years clocking a CAGR of 12%. Further this segment can be divided into 3 sub-segments namely Luxury, Business and Leisure. The growth in this segment indicates the type of travelers coming into the country.
Supply
Supply is catching pace. Metros will witness an oversupply situation after four to five years. Largely depends on business travelers but tourist traffic is also on the rise. Demand normally spurts in the peak season between November and March. High capital costs, poor infrastructure facilities and scarcity of land especially in the metros.
Demand
Barriers to entry
Bargaining power Limited due to higher competition, especially in the metros. of suppliers Bargaining power Higher in metro cities due to increasing room supply. of customers Competition Intense in metro cities, slowly picking up in secondary cities. Competition has picked up due to the entry of foreign hotel chains.
India continued to witness cheering trends in the tourism sector in 2007 with 5.2 m tourists visiting the country, registering a growth of 11% YoY. The Indian hospitality sector continued to be the forerunner of India's economic growth with support from the government. In the Budget 2007, five-year tax holidays for new star-category hotels and convention halls coming up in the National Capital Region by 2010 were announced. The Ministry has sanctioned 225 projects and utilised Rs.4.6 bn for upgradation of infrastructure facilities at important tourist destinations. Even public-private partnership is being planned to develop infrastructure projects.
DIRECTOR’S PROJECT Page 6
However, in the beginning of the year, the global crisis, slowdown in corporate earnings and rising air fares affected the hotel sector to a certain extent. Occupancy levels at hotels catering to business travellers have dropped 5% to 10% since the end of January. With the dip in occupancy levels and new supply coming in certain destinations, the room rates witnessed a marginal increase, which was much slower than what was witnessed last year. Further, with hotel rooms in India being relatively more expensive (last year was unusual when tariffs rose by 25%), a slowdown was inevitable. Average room rates (ARRs) in the branded hotel category in India have increased 280% in the past three years, as per HVS International. Bangalore saw a decline in room rates, while Mumbai and Delhi witnessed a 15% to 18% increase as compared to more than 30% hikes witnessed in FY07. Going forward, the prices will soften by the end of the year as the supplies would start coming in from FY09, which would bring tariffs to a more realistic level. The Planning Commission's High Level Group on services sector has pegged the room shortage in the country at 150,000 rooms by 2010, out of which more than 100,000 will be in the budget category. Not only the Indian hotel majors, but even international players have lined up huge capex plans. Investments of US$ 11 bn over the next 2 years are expected to be earmarked for the hotel industry in India. Further, new segments like budget hotels, service apartments and management contracts are witnessing increasing interest.
DIRECTOR’S PROJECT
Page 7
PROSPECTS
According to the 2002 estimates of the World Tourism Organisation (WTO), international tourist inflow in India by 2020 would be 10 m, which means the tourist influx has to grow at a CAGR of 6.5% for the next 14 years. This makes the country one of the fastest growing tourist destinations in the world second only to China. As of FY08, the increase in the tourist arrivals is well inline with the WTO estimates. India accounts for 0.5% of world tourism. Strong GDP growth, improving infrastructure, confidence in the country's economic prospects, open sky policy and the 'Incredible India' campaign has improved the outlook for India. This positive outlook would increase the tourist arrival in the country and the hotel industry is expected to be the major beneficiary. Even domestic tourism is gaining momentum. Rising disposable incomes, cheaper airfares and better connectivity would continue to increase the demand for rooms. India accounts for 0.5% of world tourism. Strong GDP growth, improving infrastructure, confidence in the country's economic prospects, open sky policy and the 'Incredible India' campaign has improved the outlook for India. This positive outlook would increase the tourist arrival in the country and the hotel industry is expected to be the major beneficiary. Even domestic tourism is gaining momentum. Rising disposable incomes, cheaper airfares and better connectivity would continue to increase the demand for rooms. Although prospects are promising, as mentioned earlier, any change in the global geopolitical situations can and have adversely affected the performance of this sector. Also, the heightened demand for land, especially from real estate players has led to a steep escalation in the prices. Also, shortage of manpower is going to be a huge challenge going forward. Hotel players with a diversified portfolio across different segments are likely to be the key beneficiaries. This should be one of the determining factors while investing in this sector
DIRECTOR’S PROJECT
Page 8
PARAMETERS FOR EVALUATING HOTELS AND STOCKSProfile Unlike FMCG, auto or even banking, hotel industry is more global in nature. As a result, geopolitical events, say September 11 attack, play a vital role in influencing tourist arrivals into and outside India. The ability of a player in the sector to attract the bulk of tourists coming into India and travel within the Indian border depends on select factors. These include the strength of the property portfolio (whether near a heritage site, near airport, commercial capital and so on) and brand awareness. For example, Taj (Indian Hotels) and Oberoi (EIH) are generic names in India when it comes to premium hotel chains. Normally, hotels are capital intensive in nature having long gestation periods, which not only has a bearing on the free cash flows of hotels but also affects the return on capital employed (ROCE) for a period of time. Revenues for a hotel chain are a factor of occupancy rate (number of rooms occupied) and average room rates (popularly termed as ARRs). Revenues are also derived from food and beverages, management services and so on. Consider key factors that influence occupancy rate and ARRs. Occupancy rates Consider the chart below. The hotel sector benefits from both holiday and business travel. Holiday travel in India is generally seasonal in nature. Historically, over 60% of total tourist arrivals into the country is during the period between September-May. On the other hand, business travel is a factor of various factors. This includes government’s effort to promote India as a tourist destination, long-term economic growth prospects and higher foreign participation arising by hike in FDI and FII holding limits in Indian companies and joint ventures.
DIRECTOR’S PROJECT
Page 9
For the last few years inbound (coming into the country) tourists have been around 2.5 m while out bound (going out of the country) tourists have been around 30 m. Out of the inbound, a large part of the travelers to the country are of the business class, while the rest are leisure segment. Connectivity between cities in the form of better road infrastructure, airports and seaports also play a vital role in increasing the share of India in the global tourist pie. India is a country of various cultures and has some of the world-class heritage sites, which when promoted in the global arena, can attract the global tourist. On the domestic leisure travel front (i.e. people traveling within India for both commercial and leisure reasons), there is lot of seasonality involved. Besides, as income increases, aspiration level of the population also gains ground and consequently, spills over into better occupancy rates for hotel chains. While it may not be true for luxury hotels, players in the budget hotel sector and time-share segment benefit in a large way. Average room rates (ARRs) Without getting into complexities, there are three classes of rooms in a hotel i.e. business, leisure and luxury. It is important to understand that room rates are less elastic to a fall in price at the higher end of the segment (luxury) than at the lower end of the spectrum (business/leisure). Therefore, even in a downturn, players like Indian Hotels are relatively able to maintain higher operating margins than EIH. Established players in India have an edge over MNCs and the unorganized segment, due to properties near heritage sites.
Competition also plays a vital role in determining the sector’s ARRs. Currently, the big hotels have average occupancies of 60%. This points to excess supply. That itself is sometimes a dampener on ARRs.
DIRECTOR’S PROJECT
Page 10
THE GLOBAL SCENE
International hotels are derive a big chunk of revenues from casinos and betting arenas. Margins in this segment are also higher. But for Indian hotel majors, setting up casinos and betting arenas is not allowed according to Indian laws. However, when domestic hotels are compared to international hotels then they are fairly competitive in terms of average room revenues. How to put a value to a hotel chain? Net Asset Value (NAV) is the answer. For arriving at a Net Asset Value Setting up a 5 star hotel Add Deduct Net Asset Value (NAV) Divide NAV per share Compare with current market price * depending upon the area of setup Coming to the NAV of domestic hotels, on the basis of replacement cost method let us see the value of the hotels at current prices. By NAV we can arrive at the actual value of the properties of the hotels. Based on that, NAV per share can be calculated, which gives the actual value the shareholder should be paying for being a part of the company. However, for hotels, which have been in the industry for a period of time their NAV would be on the higher side, as the property bought would be at a much lower rate than the present times. Like for instance the NAV of Taj and Oberoi Hotels would be higher than that of ITC Hotels and other hotels. Key things to look at before investing in a hotel stock 1. What are the strategy and the capex plans of the company over the next 5-10 years? As mentioned earlier, hotels are capital intensive in nature having long gestation periods, which not only has a bearing on the free cash flows of hotels but also affects the return on capital employed (ROCE) for a period of time. So the bigger the capex plan, the more caution one should exercise. This criteria is favorable for established hotel chains. = Rs 30-35 m* = Cash + investments = Debt Total No. of Shares = Rs x
DIRECTOR’S PROJECT
Page 11
2. Economic cycles also determine earnings prospects (during a downturn, properties are cheaper and hotel chain generally tend to increase capacity). Moreover, in tough times like September 11, hotel stocks take a beating. It is at this time that the established players should be looked at, for when the concerns fade away, these will be the first ones to benefit from an economic upturn. 3. A hotel chain should not be leveraged on any specific segment i.e. luxury or leisure. Though elasticity is lower at the premium end, when tourist flow is affected, this player could be the worst hit. Diversification reduces volatility in earnings, to an extent. While growth prospects continue to remain heartening, the sector is typically a high-riskhigh-return game due to the vulnerability to external factors. CURRENT PLAYERSTamanna Group enjoys a kind of monopoly in the area as well as on the taste buds of the people in and around the IT park. It has managed to cover three primary segments of the customer base as premium-lemon tree, economy-tamannna executive and cheaper range in tamannna talk about. CURRENT MARKET SITUATION AND THE FUTURE The hospitality industry witnessed a mixed year in 2008. In this article, we shall examine the factors that contributed to the growth and some of the challenges that this sector faces. The sector began the year 2008 on a strong note. Rising tourist inflow, higher occupancy and room rates continued to benefit the hotel players. In the first four months of the year, the tourist arrivals were higher by 11.7% YoY. Existing hotel companies, new foreign players and real estate players continued with their expansion plans. Prospects were looking good, until the sector faced a double blow. Double trouble The worst financial crisis in many decades, high oil prices and a slew of militant attacks hit the hotel industry. Often described as a “fragile” industry, the demand for travel is highly susceptible to events like economic slowdown, wars, disease outbreaks and terrorism. When the Indian tourism and hotel industry had just started gaining recognition worldwide, it was laid low by a double whammy. The first being the global credit crisis and the second, the recent terror attacks on the iconic hospitality landmarks; the ‘Taj Mahal Palace and Tower Hotel’ and the ‘Oberoi Trident’. Nearly 40% of the annual revenues are expected to be lost on account of the recent crisis.
DIRECTOR’S PROJECT
Page 12
Lower growth During 1HFY09, lower corporate spending, fluctuating dollar and opening of credit crisis did impact occupancy rates in some cities like Bangalore, Pune, Hyderabad and Chennai. The room rates however, remained high. While the actual number of tourist arrivals has increased, the YoY growth is on the lower side. While during 2007, a 16% YoY growth was seen in tourist arrivals during the first 8 months, the same stood at 10% YoY this year, indicating slowdown. According to the Ministry of Tourism, October 2008 saw an increase of just 1.8% in the number of foreign tourist arrivals compared to the same time in 2007.With the latest terror strike (26/11) during the onset of the peak season, things got murkier. This prompted the Indian government to ask hotels to slash their prices in the hope of keeping demand stable. Though the room rates have officially increased, hotels are selling corporate travel packages at huge discounts to maintain occupancy levels. Tour operators believe that the real discounts and tariff cuts are as high as 30% to 50%. With hotel rates touching unreasonably high levels last year, a correction was nevertheless due. Going forward 2008 was definitely a year to forget for the hotel industry and the government is taking plenty of initiatives to revive it. 2009 is to be observed as the ‘Visit India Year’. The concept is that those who visit India in 2009 would thereafter experience India's rural tourism, eco tourism, adventure tourism, wellness tourism in specially worked out packages in 2010 and 2011. Further, the rate cuts would also make India a cheap tourist destination to visit. Further, cost pressures, liquidity crisis and regulations concerning the real estate sector have made funding for hotel projects difficult. This coupled with unrealistically high land prices and government red tapism could result in hotel projects taking longer to fructify. Real estate players (DLF, Unitech, Parsvnath) are being hit adversely by the market slowdown. The phenomenon is expected to have an effect on hospitality development in India. This may lead to a stop or delay in the completion of projects as well as a revision of the project expenditure. As per KPMG, only 60% of hotel projects announced in key metros are operational as per schedule. Developers have also diverted their plans in favour of commercial or residential buildings due to liquidity crunch and higher land prices leading to a longer breakeven period. Considering all these factors, industry estimates that just over half of the planned 0.1 m new rooms will finally be built. Hence, considering the demand supply mismatch, the new room additions will not create overhang. Thus, we believe that the existing players would benefit from the continued demand-supply mismatch once the economy revives. While leisure travel would continue to be low, business travel, domestic travel, medical tourism and mid market segment would be the target areas.
DIRECTOR’S PROJECT
Page 13
As per estimates, domestic tourism has risen from 366 m in 2004 to 462 m in 2006, emerging as a major driver for the industry. Just to give an idea about how big this opportunity is, we can say that the domestic tourists’ number is more than the entire population of the US. This slump in the industry will also provide opportunities to existing hotel companies with high cash in their kitty to acquire distress assets at cheaper valuations. While the summer would be cold for the hotel industry, with India’s fundamental prospects being attractive over the long term, the momentum would get better.
DIRECTOR’S PROJECT
Page 14
THE HOTEL
Hinjewadi IT Park The Hinjewadi IT Park (officially called as the Rajeev Gandhi IT Park), is a project undertaken by MIDC to promote the IT sector in Pune. When completed, the Hinjewadi IT Park is expected to have an area of about 2800 acres. The estimated investment in the project is Rs. 600.0 million. The whole project will be developed in phases. Here is an approximate breakdown of the phases: Phase I: 198 acres Phase II: 470 acres Phase III: 985 acres Phase IV: 1100 acres The IT Park has been planned for following facilities:
? ? ? ? ? ?
Connectivity through Bharat Sanchar Nigam Limited (BSNL) Exchange and Software Technology Parks of India (STPI) 24/7 electricity supply 24/7 water supply, including a Hill Service Reservoir Garden, landscaping and a recreation center Underground drainage system Fully asphalted roads with footpath and side gutters
In addition, the following facilities are planned as an integral part of the overall development:
? ? ? ? ?
Golf Course 3-star hotel Business Resort Tree plantation in open spaces Development of Residential Zones including schools
Hence Hinjewadi with it s IT companies forms a major business opportunity for the Hotel Industry. The current players in this target business group in Pune are : The major players in the Hotel Segment we are targeting in Pune are: ? ? ? ? ? ? ? Lemon Tree Hotels St Laurn Hotels Hotel Taj Blue Diamond Quality Inn Centurion The President Hotel Pride Hotel Le Meridiens
Page 15
DIRECTOR’S PROJECT
?
The Central Park
Out of these, the hotels which are located in Hinjewadi are :
? ? ? ?
Lemon Tree Hotel St Laurn Hotel Nirali Hotel Tamanna
The following part of the report will cover the areas involved in setting up a hotel in the area to exploit the business opportunity.
Demand Forecast: Total number of Hotel rooms in Hinjewadi: 322 Average Occupancy Rate: 77% Total number of rooms in the 3-star and 4-star category: 207 Average Occupancy Rate: 72% ARR (Average Room Rates) in the 3-star and 4-star category: 13500 Proportion of the planned area of Hinjewadi that is developed: 21 % (660 acres out of the planned 2800 acres) Industrial growth rate in Hinjewadi: 12% Estimate of growth in the demand of the hotel rooms: 6% Forecast of the demand of rooms in 3 star and 4-star category:
1 253 2 284 3 319 4 358 5 401 6 450 7 504 8 565 9 633
DIRECTOR’S PROJECT
Page 16
Revenue Forecasts:
Year 1 Year 2 Year 3 Year 4 Monthly Revenue Annual Revenue 25200000 302,400,000 338,688,000 379,330,560 424,850,227 Salaries of Staff 8,712,000 9,234,720 9,788,803 10,376,131 Administration Expenses 210,200,000 220,710,000 231,745,500 243,332,775 -1500000000 83,488,000 108,743,280 137,796,257 171,141,321
Year 5 475,832,254 10,998,699 255,499,414 209,334,141
Year 6 532,932,125 11,658,621 268,274,384 252,999,119
Year 7 596,883,980 12,358,139 281,688,104 302,837,738
Year 8 668,510,058 13,099,627 295,772,509 359,637,922
Cost to set-up the hotel: 150 crores Cost of Capital: 12% NPV: 11, 48, 35,774 Rs Location Details: Three sites that have been identified for the project are: Wakad Flyover area Hinjewadi Phase 2 Hinjewadi Phase I ( Beyond St Laurn Hotel)
Out of the above sites, area near Wakad Flyover is a promising because of the following reasons: Proximity to Mumbai Pune Expressway Proximity to Hinjewadi IT Park Proximity to Pune City Proximity to Balewadi Stadium
Permission and Clearances Requirement: For setting up the hotel, clearances from the following authorities would be required: Maharashtra industrial Development Corporation Maharashtra Pollution Control Board Pimpri Chinchwad Municipal Corporation
Page 17
DIRECTOR’S PROJECT
Construction of the Hotel: The construction of the hotel will be outsourced to separate contractors. The construction contract would cover the following details. Design of the rooms. Construction of the entire facility. Interior Design Machinery, Appliances. IT infrastructure
The selection of the appropriate contractor is left to the discretion of the Hotel Management. The hotel would be actively involved in the construction phases in terms of approvals and monitoring. Technical Aspects: The various technical aspects of the project would be The IT Infrastructure Major Machinery and Electrical Equipment Requirement Safety Considerations
Area Requirement: After conducting a detailed study of the other hotels in the area and the future business requirement, the total number of the rooms planned for the hotel is 100. The total area requirement for the hotel along with the rooms and the other facilities would be 25,000 square feet.
Accommodation Details: The detailed breakup of the accommodation facilities is as given below:
Room Type Superior Room Deluxe Room Executive Room Studio Room Executive Suite Number 15 55 23 5 2 Type Rooms with single beds Rooms with single beds Rooms with king/twin beds, electronic safe Rooms with king beds and large sitting area, including one room for the physically challenged, electronic safe Suites with king beds, a separate sitting room and great views (each interconnecting to a Deluxe Room), electronic safe
DIRECTOR’S PROJECT
Page 18
As the Hotel would be a 4 star type, the hotel would have following facilities as a part of the rooms: ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? Dining: The hotel would have following dining features: An eclectic all day dining menu includes Indian, European, American and pan-Asian cuisines in addition to special home grown recipes A coffee Shop Recreational Bar and Lounge Air conditioning High-speed WiFi net access A full-sized work desk with ergonomically-designed executive chair 3 telephones with global direct dial and voice mail Power outlets at desk level (adaptors available on request) Flat-screen color TV with multi-channel cable Tea and coffee maker Mini-bar with 2 complimentary bottles of packaged drinking water (provided daily) Orthopedic mattress with high-quality pillows and bed linen Full-length mirror Automatic telephone wakeup call service Opaque curtains to provide total blackout Well-appointed bathroom with high pressure hot and cold water and complete range of toiletries Vacuum-sealed, double-paned windows for noise reduction Electronic safe deposit box
Corporate Meeting and Conference Rooms There would be a total number of the 2 rooms for the meeting purposes – M1 and M2. M1 would have a capacity of 60 theater style, 48 classroom style and 38 U-shape. Capacity of M2 would be 16 theater style and 12 classroom or boardroom style. The meeting room would be equipped with the following facilities: Wifi Broadband Internet Access. Surround Sound System Built in LCD projector with screen. Large screen television with attached DVD player
Safety Considerations: In terms of growing safety considerations, the hotel would have following features:
DIRECTOR’S PROJECT
Page 19
? ? ? ? ? ? ? ? ?
Individual fire indicators outside each room to expedite emergency response in case of a fire emergency Wide angle (110 degrees) peephole on room entrance doors Safety chain and double lock facility in the main room door interactions Emergency procedures notice displayed behind the entrance door Fire resistant room door (up to a limited extent) All entrance doors will lined with an environmental seal to minimize noise and protect the room from external smoke, in case of fire Smoke detector in each room Water sprinklers in each room for enhanced fire safety Entrance door and bathroom doors can be double locked from the inside
Tariff Rates: The initial tariff rates that have been planned for the rooms are as follows. The tariff rates have been decided by taking into consideration the tariff rates of the other hotels in the area and the competitive advantage:
Room Type Superior Room Deluxe Room Executive Room Studio Room Executive Suite Tariff Rates ( Single) in Rs. 8000 9000 11000 13000 16000 Tariff Rates ( Double) in Rs. ----11000 13000 15000
Target Market 1. Businessmen – Travel for business purposes. 2. Business Executives, IT professionals – Can be foreign delegates, employees, professional trainers, job seekers, etc. 3. Faculty / staff of colleges in the area (SIC, IIIT, Indira College, etc.) 4. Students or their family members Existing Rates 1. 2. 3. 4. Lemon Tree Hotel – Rs 9500 – Rs 14500 per day St Laurn Hotel – Rs 13200 - 15400 per day Hotel Nirali – Rs 1000 - 3000 Hotel Tamanna – Rs 2200 – 3200 per day
Man Power Requirement: Total Manpower requirement of the hotel would be 55.The details of the manpower requirement are as follows: Hotel Receptionists- 3 ( working in three shifts )
Page 20
DIRECTOR’S PROJECT
-
Hotel Attendants – 10 ( Working in three shifts) Room Service Staff – 20 (Working in three shifts ) Kitchen Staff – 20 ( Working in three shifts) Manager – 2 ( Working in two shifts)
DIRECTOR’S PROJECT
Page 21
INSTITUTE FOR HOTEL MANAGEMENT STUDIES
The boom in the tourism industry has resulted in the immense growth of hotel industry in India. The hotel industry promises a bright future for anyone who wishes to take up a career in this segment. The students opting for hotel management career courses must have an affinity towards socializing and understanding the needs of the people. As hotels fall under the service industry, the motive of hotel management courses in India is to prepare the students to face the challenges of this competitive world. As far as tourism industry in India is concerned, it is attracting tourists from across the world and this definitely calls for quality hospitality.
Hotel Management as a Career Option
Hotel management is one of the most interesting career options in the contemporary job market. Career training from a recognized and reputed hotel management institute is just an icing on the cake. In India there are many hotel management institutes and colleges which provide hospitality or hotel management courses. These hotel management courses make one aware of the operating-sections of the hotel industry like front office, general operations, sales and marketing, food and beverage, service keeping and catering. THE TOP TEN HOTEL MANAGEMENT COLLEGES IN INDIA 1. Oberoi Centre, Delhi 2. IHM, Mumbai 3. WGSHA. Manipal 4. IHM, Delhi 5. IHM, Aurangabad 6. IHM, Bangalore 7. IHM, Chennai 8. IHM, Calcutta 9. IHM, Ahmedabad 10. Christ College, Bangalore (Source: Outlook-Cfore survey, Outlook, 11th June, 2007)
The four parameters used for evaluation of these institutes were- faculty, pedagogic systems, infrastructure and placements.
Since Symbiosis International University has a strong foothold in the education sector, it can leverage the same in developing a hotel management institute of great repute.
DIRECTOR’S PROJECT
Page 22
ABOUT THE INSTITUTE
The institute will be located next to the five star hotel that has been mentioned in the previous section of this report. The fact that the hotel would be partly owned by Symbiosis itself, would allow the institute to provide its students will hands on industry experience, through training and live demonstrations in the hotel itself. Since Hotel Management is a people oriented field, which needs more of practical knowledge and exposure, the benefit of having a five star hotel set up by the same parent university would proved ample exposure to the students, and would work as a competitive advantage for the new institute. Also, in-hotel learning and classes can be held, which is a rare concept, but one of the most effective ways to develop students into leading hospitality professionals. Also, the Institute will be having tie ups with international universities for student exchange programs and knowledge sharing, so as to provide its students with an international exposure and experience of the hotel management industry. COURSES OFFERRED Initially, the institute can start by offering a regular, 3-year full time graduation (BSc.) in Hotel Management. After having developed a strong brand name, the college can look at offering more courses like: - Diploma in Food Production (6 months) - Diploma in Food & Beverage Management (6 months) - Post Graduate Diploma in Hotel Management - Diploma in Accommodation Management (6 months) However, in the initial years, the college would look at developing its expertise into the field of imparting hotel management education, and should hence start off with one course only.
DIRECTOR’S PROJECT
Page 23
COURSE OVERVIEW
The course would be divided into 6 semesters, spread across 3 years, with mandatory training period during the summer break, i.e. 6-8 weeks of internship in hotels, airlines etc. Semester One: Would give a basic understanding to the student about the hospitality industry, various important details, and would look at basic skill development. The subjects that may be offered are: 1. 2. 3. 4. 5. 6. 7. 8. 9. Foundation Course in Food & Beverage Service Foundation Course in Front Office Operations Foundation Course in Accommodation Operations Foundation Course in Nutrition & Food Science Basics of Accounts & Finance Foreign Language IT in Hospitality Industry Principles & Practices of Management Business Communication & Etiquette
Food and Beverage Service:
The course aims at developing a comprehensive knowledge and understanding of restaurant service in the hotel and catering industry. It also aims to enable the student to acquire professional competence at basic levels and to acquire the requisite technical skills in the principles of food service and its related activities. ? ? ? ? ? ? ? ? Introduction to the hotel and catering industry Layouts of food service areas Food and beverage service equipment Meals and menu planning Dining service methods and procedures Simple control systems Non-Alcoholic Beverages and their service Tobacco
Front Office Operations:
This course aims at equipping the students with the necessary skills to work in a nonautomated, semi-automated and automated system of a Front Office. He is also equipped to understand the guest cycle and gains skills in effective handling of routine Front Office procedures. ? ? ? ? ? ? Introduction to Front Office Operations Importance of Reservation and its procedures Check-in and Check-out procedures Preparing Guest Weekly Bills Telephone Etiquette Complaint handling
Page 24
DIRECTOR’S PROJECT
Accommodation Operation:
This course aims to establish the important role of accommodation services within the hospitality industry. It also gears the student to acquire skills and knowledge necessary to successfully identify the required standards in this area and to consider all aspects of cost control and establishing profitability. ? ? ? ? ? ? Role of Housekeeping in the Hospitality Operations Cleaning equipment and agents Operating Procedure For Servicing a Guest Room Safety Procedure Periodic Cleaning Programme and Public Area upkeep Inter-departmental Relations
Financial Accounting :
The student required to understand the significance and the role of finance in the hotel and tourism industry and to develop an attitude of cost controls. The above aims are achieved through the use of practical accounting procedures. ? ? ? ? ? ? ? ? Accounting practices in business organisations Financial statements Revenue and expense accounts Transaction analysis Debit and credit concepts Accounting records and information Presentation of basic accounting information Use of accounting software
IT in Hospitality
This course is structured to introduce the student to the computer and their terminology and thereby make the student computer literate. This objective is achieved through practical hands-on exposure. ? ? ? Computer fundamentals --- basics of hardware and software. Introduction to an Operating System Word Processing.
Languages
French : The objective in imparting training in French is to equip students in the French language to have proficiency in spoken French with special reference to the hospitality industry.
DIRECTOR’S PROJECT
Page 25
Nutrition and Food Science
The course aims to impart knowledge in the basic principle of Nutrition and their practical applications. While in food science the students learn about the harmful and beneficial role of microorganisms in food. Nutrition : ? ? ? ? Proximate principles Minerals Vitamins Meal planning
Food Science ? ? ? ? ? ? Microbes Food Infection and Poisoning Hygiene Management Systems (HACCP) Food Spoilage and Preservation Food Adulteration Food Additives
Semester Two would offer a deeper understanding of the hospitality industry and management subjects. 1. 2. 3. 4. 5. 6. 7. Food Production Hotel Engineering Foundation Course in Tourism Marketing 1 Leadership Principles and practices of management Foreign Language
Food Production:
The course aims at developing a basic awareness of the technical skills required in the production department. It also gives a comprehensive insight into the commodities required, their characteristics, uses, and handling procedures. ? ? ? ? ? ? ? Kitchen organisation and equipment Basic menu planning Basic principles of food production Methods of cooking Bakery and patisserie Culinary terms Foundation ingredients
Page 26
DIRECTOR’S PROJECT
Hotel Engineering
? ? ? ? ? Preventive and Breakdown Maintenance Heating, Lighting and Ventilation Systems Sanitary and Plumbing Systems Refrigeration and Air-conditioning Fire safety procedures
After the first year of college, the students would be required to pursue 6-8 weeks of industry training in hotels, airlines etc. This would be graded project. Year 2 subjects would offer students a wider variety in terms of content, and their would be more focus on practical learning. Semester 3: 1. 2. 3. 4. 5. 6. 7. 8. Food Production & Patisserie Food & Beverage Service Operation & Management Front Office Operations & Management Accommodation Operations & Management Hotel Accounting Human Resource Management & Law Approaches to Research Hospitality Marketing 2
Semester 4: 1. 2. 3. 4. 5. Food Safety and Quality Communication skills in English Management in Tourism Contemporary Issues in Hospitality Industrial Training, in college hotel with regular evaluation.(10 weeks)
Once the students complete their year two in the course, they are expected to get real work life experiences through internship of 15-20 weeks in a reputed hotel. These internships need to be routed through the college. Semester 5: 1. 2. 3. 4. 5. Advance Food Production Operations Advance Food And Beverage Operations Front Office Management Accommodation Management Food & Beverage Management
DIRECTOR’S PROJECT
Page 27
Semester 6: 1. 2. 3. 4. 5. Facility Planning Financial Management Strategic Management Research Project Tourism Marketing
The III year involves detailed study in the 4 core areas : 1. 2. 3. 4. Food Production Food and Beverage Service Front Office Management Accommodation Operations
Along with practical sessions to develop practical competence in the above core areas, the student also gets exposure to allied areas like 1. 2. 3. 4. 5. Hotel Management Application of Computers Language -- French Marketing and Sales Law
ADMISSIONS Student intake: 120 Admission Criteria: The candidate should have successfully cleared 10+2 from state or central board, with a minimum percentage of 55%. A national Aptitude entrance test will be conducted, testing the candidates on the following parameters: o Quantitative aptitude o English o Data Interpretation and Reasoning o General knowledge
Once the candidates are shortlisted on the basis of the entrance test scores, interviews will be conducted, and top 120 students are selected. Hostel accommodation compulsory for all students.
DIRECTOR’S PROJECT
Page 28
FACILITIES:
FOOD PRODUCTION LAB: Fully equipped with: 1. 2. 3. 4. ADVANCED TRAINING KITCHEN QUANTITY TRAINING KITCHEN BASIC TRAINING KITCHEN BAKERY
LAUNDRY: The Institute will have a well-equipped automated laundry along with facilities for training students in Guestroom Management. COMPUTER LAB Equipped with 50 terminals on a Local Area Network with the latest multi-media systems with Internet connectivity. Students will have hands-on experience with HMS and application packages LIBRARY The Institute will have a well-stocked library with the latest books, periodicals, journals both national and international covering all aspects of Hotel, Tourism, Hospitality, Travel and Management. The library will also have a good collection of Video tapes on all aspects of management and hoteliering which could be viewed by the students. The Library will have multi-media resources enabling students to access Internet. VIDEO PRODUCTION LAB The Institute will have a video production lab equipped with the state-of-the-art equipment to produce training films. Students will be required to produce training films as part of their projects during the Final Year of study.
DIRECTOR’S PROJECT
Page 29
FRONT OFFICE Role playing, Situation Handling, Other Front Office related exercises, Property Management Systems, accounting are the key areas of training in this lab. RECREATIONAL FACILITIES:
1. 2. 3. 4. 5.
Basketball court Table Tennis Swimming Pool Gym and Fitness Centre Games Room for indoor games
AUDITORIUM: A large, plush, air-conditioned auditorium, with a seating capacity of 300 students. COURSE FEES: Rs. 52,500 per annum, inclusive of hostel and mess charges. FACULTY: Since the student intake is 120 students, so to maintain a healthy student-faculty ratio, the batch will be divided into 3 sections of 40 students each. The faculty would comprise regular in-house faculty as well as industry experts who come as visiting faculty. Some qualifications that the faculty are expected to have: A wide variety of professionals with ample industry experience Extensive teaching experience Diploma holders in o Hotel Management o Catering Technology o Applied Nutrition o Tourism Management
Science graduates and post graduates Commerce and accounts graduates Page 30
-
DIRECTOR’S PROJECT
BREIF OVERVIEW OF THE MARKETING STRATEGIES
MARKETING OBJECTIVES: 1. Create awareness about the hotel. 2. Position it as a exclusive five star hotel, which pampers the customers. 3. Position it in the gap in the market, since most hotels around Hinjewadi are not high on the exclusivity quotient. 4. Create Brand preference. 5. Spread awareness about the institute as well. TARGET MARKET STRATEGY: The targets would primarily be travelling professionals from the following industries who frequent Pune for work. IT Travel Trade and Commerce Automotive
MESSAGING In order to present and position itself as a exclusive five star hotel, we would need to keep the messages in all our communication very high quality, innovative, subtle and classy. The messaging would represent the high standard we want to be associated with. Brochures will be printed on high quality paper, with quality pictures. PROMOTION ? Primary focus will be on print ads in trade publications, internet and high end magazines. ? Direct mail campaigning to prospective customers would help to increase the effectiveness of promotion, as it is a form of targeted promotion. ? A high amount of Public Relations activities will be undertaken so as to create awareness and develop a positive public image for the hotel. ? Present the hotel as a supportive member of the society, by participating in various significant local events. ? For direct marketing, we can buy the contacts information of select list of corporate houses and send them information about the hotel, and invites to special gatherings. ? For the institute, advertise in youth newspapers, and supplements like Education Times, HT Horizon, along with tie ups with coaching institutes. ? Carry out counselling sessions in schools for students, to make them aware of hotel management as a career option, and our institute.
DIRECTOR’S PROJECT
Page 31
WEB PLAN Develop an attractive, interactive website, so that customers can have online bookings, check their room status and make payment online. The look and feel of the website should be in line with the exclusive image of the hotel. Make sure that all major travel sites like makemytrip.com, yatra.com list our hotel in their website when customers search for hotels. SALES For sales, we would depend on corporate visits the most. Repeat visits by key corporate would form the bulk of our sales. So it becomes important for us to develop long lasting relationships with those key accounts through Loyalty Programs. Offer them discounts; make them aware of any updates of the hotel activities, induce them to celebrate their functions in the hotel, so give them extra benefits. In short, make them feel part of the family. Since the most important part is building relationships, we need to make each business traveller feel that we remember her/him and their details, likes, dislikes so as to make them feel special. This requires a great deal of integration in all business activities and implementation of ERP. PROSPECTING Whenever a new customer comes to the hotel, we should be able to determine whether it is for business of leisure. If it is for business, we should be able to collect his business card, and send to his organisation a corporate packet making them aware of our hotel, corporate packages/pricing and special business amenities.
DIRECTOR’S PROJECT
Page 32
doc_910516908.docx